Singapore signs carbon credit transfer agreement with Ghana
CORPORATES in Singapore may soon have access to a larger pool of carbon credits which they can buy to offset 5 per cent of their taxable emissions.
This comes from the signing of a carbon credits transfer agreement between Singapore and Ghana, the second country after Papua New Guinea to sign such an agreement with the Republic.
The implementation agreement was signed virtually on Monday (May 27) between Singapore’s Sustainability and the Environment Minister Grace Fu and Ghana’s Environment, Science, Technology and Innovation Minister Ophelia Hayford. It sets out a legally binding framework and processes for the generation and international transfer of carbon credits between Singapore and Ghana.
The agreement is aligned with Article 6 of the Paris Agreement, which governs rules on the bilateral and international transfer of carbon credits. Under Article 6, Ghana will have to increase its reported emissions by the amount of carbon credits it has transferred to Singapore, to avoid double counting. One carbon credit represents a reduction, avoidance or removal of one tonne of carbon dioxide equivalent.
Just like the agreement with Papua New Guinea, this deal with Ghana requires project developers to contribute 5 per cent of their share of proceeds from authorised carbon credits towards climate adaptation in the West African country. These funds will go towards helping Ghana prepare for and adjust to the impact of climate change.
Project developers will also be required to cancel 2 per cent of authorised carbon credits at first issuance to ensure additional contribution to overall mitigation of global emissions.
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The collaboration advances the climate ambitions of Singapore and Ghana, and channels financing towards additional mitigation efforts, said a joint statement by the Ministry of Trade and Industry, the Ministry of Sustainability and the Environment, and the National Climate Change Secretariat (NCCS) on Monday.
“The carbon credit projects authorised under the implementation agreement will seek to promote sustainable development and generate benefits for local communities, such as the creation of jobs, access to clean water, improved energy security, and reduction of environmental pollution,” said the statement.
The agreement means that Ghana joins Papua New Guinea on the eligibility list under the International Carbon Credit (ICC) Framework.
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The arrangement does not, however, mean that corporates can buy carbon credits generated from any carbon project in Ghana. Only credits generated under projects assessed and approved under the ICC framework are eligible.
Fu said that Singapore and Ghana share many mutual interests in the sustainability sphere.
“The carbon credit projects implemented under this agreement will generate climate benefits as well as benefits to our economies. Singapore will continue its efforts to work with like-minded partners like Ghana to co-create opportunities for a sustainable future,” she added.
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